Law: Sales Tax Act (III of 1951)

Section: 26-A

Law: Income Tax Act (XI of 1922)

Section:

(NOTE:Wrongly 2 citations added in PLD.Both are mentioned.)    Income-tax Act (XI of 1922), S. 26-A-Registration of firm Firm must be in existence during accounting year-Agreement of partnership has to be effected by a deed-Instrument merely recording fact of bringing into existence of partnership at earlier stage-Does not fulfil requirement of law-Firm verbally constituted on 1-4-1956 and terms of agreement reduced to writing on 25-4-1956-Deed executed on Z5-4-1956 cannot bring firm into existence with effect from 1-4-1956-Registration, held, rightly rejected.   Commissioner of Income-tax v. Noor Hussain P L D 1964 S C 657 rel.    JUDGMENT   A. S. CHOWDHURY, J.-The assessee applied for registration of the firm claiming that it was a partnership firm entitled to registration under section 26-A of the Income-tax Act.   The Income-tax Officer rejected the sprayer on the ground "that the partnership was formed as a result of an oral agreement on 1st April 1956 and the deed was executed on the 25th day of April 1956, to put into writings the terms and conditions verbally agreed upon. Section 26-A does not recognise any partnership which is not constituted by an instrument of partnership. As in the present case the partnership was formed by verbal agreement and the deed was executed to put into writings the terms and conditions verbally entered into the deed neither created the partnership nor re-created an old one."   The assessee moved the Appellate Assistant Commissioner who confirmed the order of the Income-tax Officer. On a further appeal the Tribunal reversed the orders of the Income-tax Officer as well as the Appellate Assistant Commissioner and directed the registration of the firm for the assessment year in question.   The Commissioner thereafter moved the Tribunal for a reference to this Court under section 66 (1)- of the Income-tax Act and the Tribunal being of the view that a question of law arises in this case, has referred the following question for opinion of this Court:   "Whether on the facts and in the circumstances of the case and on the basis of the deed of partnership executed on…